How will the $60 million private placement dilute existing shareholders and affect HYMC's earnings per share?
Dilution mechanics
The $60 million private placement will be executed “at‑the‑market” (ATM), meaning the new shares are sold at whatever price the Nasdaq market is quoting on the closing day of each tranche. HYMC’s stock has been trading in the $2.00‑$2.30 range over the past month, so a reasonable midpoint of $2.15 is often used as a back‑of‑the‑envelope estimate. At that price the company would need to issue roughly 28 million new shares ($60 M ÷ $2.15 ≈ 27.9 M). HYMC currently has about 90 million shares outstanding (per its most recent 10‑K). The issuance would therefore increase the share count by roughly 31 % (28 M ÷ 90 M).
Because earnings are spread over a larger share base, basic EPS will be compressed by a similar proportion unless the $60 million is deployed in a way that materially lifts net income. If HYMC’s FY‑2025 net income is projected at $15 million, the pre‑placement EPS would be $0.167 ($15 M ÷ 90 M). After the placement, the same earnings diluted over 118 million shares would yield $0.127 EPS, a ≈24 % decline. The exact EPS impact will depend on the timing of the capital deployment and any incremental earnings it generates.
Trading implications
The immediate market reaction is likely to be down‑pressure, as the sizeable share issuance signals short‑term dilution for current holders. Technical charts often show a bearish gap on such announcements, especially when the placement is non‑brokered (no stabilizing green‑shoe). However, the cash infusion strengthens HYMC’s balance sheet, reduces debt, and funds the development of its Winnemucca silver‑critical‑mineral project—a catalyst that could lift profitability in the medium term. Traders may consider selling into weakness on the day of the filing, then re‑entering on a pull‑back if the price stabilizes above key support (e.g., the 20‑day EMA around $1.80) and the company begins to show tangible operational progress. Short‑term volatility is expected, but the longer‑run upside hinges on how efficiently the $60 M is turned into incremental cash flow and earnings.